When supply decreases, the equilibrium price and the equilibrium quantity .

Question

Quizplus · Accepted Answer

When supply decreases, there is less of a product available for consumers to purchase, which would increase the demand for the product. As the demand increases, the price would also increase, resulting in a rise in the equilibrium price. However, the decrease in supply means that there is less of the product available, resulting in a decrease in equilibrium quantity. Therefore, the correct answer is D - rises; decreases.

When Supply Decreases, the Equilibrium Price and the Equilibrium Quantity